Legal Alerts

2019 HSR Filing Thresholds and Interlocking Directorates Thresholds Announced

(February 19, 2019)

Revised HSR Filing Thresholds

On February 15, 2019, the Federal Trade Commission announced the revision of the jurisdictional thresholds for the mandatory notification of certain mergers and acquisitions prior to consummating the transaction pursuant to section 7(a) of the Clayton Act 15 U.S.C. § 18a, as amended by the Hart Scott Rodino Act (HSR) of 1976:

– Transaction value in excess of $359.9 million, reportable notwithstanding “size of the persons.”

– Transaction value in excess of $90 million but not more than $359.9 million then:

• Acquiring Person has assets or annual net sales of $180 million and
• Acquired Person has assets or annual net sales of $18 million.

OR

– Transaction value is in excess of $90 million but not more than $359.9 million then:

• Acquiring Person has assets or annual net sales of $18 million and
• Acquired Person has assets or annual net sales of $180 million.

Filing Fees:

• $45,000 for transactions valued at greater than $90 million but less than $180 million.
• $125,000 for transactions valued at $180 million but less than $899.8 million.
• $280,000 for transactions valued at or in excess of $899.8 million.

Civil Penalties for Failure to File:

• Currently $41,484 per day, but likely to increase once indexed to changes in the Gross National Product (GNP), as are the filing thresholds and filing fees.

The new thresholds will become effective 30 days after publication of the new thresholds in the Federal Register and will apply to transactions that close on or after that date. The effective date is likely to be mid-to-late March.

Revised Thresholds for Section 8 of the Clayton Act Targeting Interlocking Directorates

Section 8 of the Clayton Act prohibits any person from holding positions as an officer or director of competing corporations engaged in commerce. This provision is particularly relevant to individuals at private equity firms who, in the course of his/her duties, is an officer or director of several entities. Section 8 applies where:

• Each competing corporation has capital, surplus, and undivided profits aggregating more than $36,564,000, and
• Competitive sales of either corporation are more than $3,656,400.

Safe harbors exist that are based on calculating the competitive sales as a percentage of the corporation’s total sales.

The new thresholds applying to Section 8 take effect immediately upon publication in the Federal Register.

The FTC’s press release announcing the changes to the HSR filing thresholds and the thresholds applicable to Section 8 can be found here.

For additional information on these revised thresholds, visit our Antitrust & Competition page. Sign up to receive the latest Lewis Brisbois Legal Alerts here.

Author:

Katherine I. Funk, Co-Managing Partner

Related Practices

• Antitrust & Competition
• Corporate

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